The Basics of Financial Aid

Written by Tom Anderson on July 6th, 2012

Contributing author for MyOnlineColleges.com

The cost of quality education has greatly increased than it was a couple of decades ago. The average cost of attending and getting a degree in a reputed college, today, costs about $7,000 and more annually. Paying off such a large sum of money gets difficult for some families and for many it is next to impossible without having any financial aid by the Government or some organizations.

Overview of Financial Aid

Financial aids are given to students that wish to pursue higher studies but are not of sound financial position to pay their college fees. When a candidate applies for a course in a college, the college attaches an offer for financial aid along with the acceptance letter after scrutinizing the income of the candidate’s family. About 15 million students are pursuing post-secondary education at some level or the other and among them 50% are such students that are unable to pay their fees in full. They are entitled for financial aids that are offered by Government and other organizations.

Types of Financial Aids

Scholarships – This is the most common form of financial aids that is offered on the basis of merit or need. Scholarships are known as ‘gift aid’ as they are not to be repaid, so most of the students are interested to get this type of financial relief.

Fellowships – This financial aid is usually offered to students that have chosen their course of study and will be doing research work. This aid is also not meant to be repaid but the institute offering the fellowship may ask for completing a certain research project for them.

Grants – Of grants, Pell Grant, which is granted by federal government, is the most sought after financial aid for students looking for a relief over their tuition fees. Besides that, other grants also granted by federal government like SMART grant, Academic Competitiveness grant and Supplementary Education grant are available for students. There are also other grants available sponsored by the state.

Loans – Loans are less popular among students due to the fact that it is not a gift so it has to be paid off by the students after a certain stipulated period. Loans are offered by both the federal government and other private organizations. The interest rates for loans vary with different organizations and the repayment duration is flexible too.

Work Study – Some students choose to work part-time to earn some bucks and then pay off their tuition fees and other expenses. Students are paid for work that they do at the university during the academic year of their college as a part of a federal financial aid package for undergraduate students.